Fugro: Record results
Key figures (in EUR million) 31 December 2012 Change 31 December 2011
Revenue 2,165.0 16.5% 1,858.0
EBITDA 467.0 (3.1)% 481.9
EBIT 308.3 (12.4)% 352.0
Net result* 291.6 1.4% 287.6
Net margin (%) 10.8% 15.8%
Basic earnings per share (EUR)* 3.63 0.0% 3.63
Proposed dividend per share (EUR)* 2.00 33.3% 1.50
Cash flow 401.4 (7.0)% 431.5
Investments 261.7 (27.1)% 359.2

* Includes continued and discontinued operations

Business development
Major events in 2012 included the US election, continued unrest in the Arab world, the economic uncertainties in Europe and the USA and continued pressure on the European Union and the Euro. At the same time the oil price remained at a high level in line with the long term outlook for continued need for oil and gas. In 2012, as in 2011, the effects on Fugro were limited thanks to our position in the oil and gas market and our strategy to focus on providing a broad range of services across the value chain of our customers, and creating client-, regional-, and market diversity, all healthy differentiators for Fugro.

Fugro had a number of special events in 2012. We celebrated the 50th anniversary of the company and entered into the negotiations around the divestment of the majority of the activities of the Geoscience division. These negotiations resulted in a sales and purchase agreement with CGG in France. The transaction closed with effective date 31 January 2013. In addition, Fugro entered into the Seabed Geosolutions joint venture with CGG which closed 16 February 2013. Fugro has a 60% stake in this joint venture and has control. Further, it was decided that Fugro will review its strategy in order to optimise stakeholders’ interests. This review is in progress and we will share the outcome with stakeholders in the course of the second half year 2013.

The demand for energy remained stable, as also reflected in oil prices of around USD 112 per barrel (Brent). As a result, and in order to compensate for depletion and meet the expected increase in future demand, the oil and gas industry has further increased its spending on global exploration and production. Oil and gas will remain important for decades. Although use of energy from renewable sources such as offshore wind farms is growing rapidly, it still only makes a small contribution globally. Also the impact of shale gas will be increasingly important for the world energy supply.

Many of Fugro’s activities are related to energy. Global developments have resulted in an increasing demand for our services in various activities, but fell short of earlier expectations. This applies specifically to marine seismic surveys and subsea support services for offshore installations, where weak volumes in specific geographical regions are lower. Demand for offshore construction-related services picked up slightly during the year, but recent publications of companies operating in this part of the business indicate that recovery could be slower than originally anticipated.

The picture in non oil and gas sectors in which Fugro operates showed regional variations. Demand for services for large infrastructure projects in Europe and the United States, for example, remained weak. Although activities that largely depend on government funding, such as infrastructure, aerial mapping and construction, were generally under pressure in the ‘old economies’, we saw great opportunities in emerging areas like Kazakhstan and East Africa. Mining-related work recovered early 2012 after a few difficult years, but became quiet again after a short period of time.

The growth in revenue continued. Fugro achieved record revenue (continued and discontinued business) for the year of EUR 2,952.7 million (2011: EUR 2,577.8 million). The increase was attributed to all divisions.

Continuing price pressure in a number of sectors resulted in a lower net profit margin (continued and discontinued business) of 9.9% (2011: 11.2%). In absolute terms, however, net profit for the year attributable to owners of the Company of EUR 291.6 million exceeded that of any previous year, including the IFRS related effects of the divestment in 2013, which are in balance insignificant on the net result of 2012. The net result after tax for the continued business is EUR 232.8 million (2011: EUR 293.9 million) and a net profit margin 10.8% (2011: 15.8%). The lower margin is primarily due to the short fall in Subsea services and OBN (first half year 2012).

Fugro’s financial position is solid and was further secured early 2013 by the sale of the majority of the Geoscience division to CGG. At closing Fugro received some EUR 700 million in cash, which improved the financial situation even more and has a positive effect on the gearing.

Fugro’s broad range of services enables the company to offer one-stop-shopping solutions to clients for complex projects. This applies both for new oil and gas developments, as well as large infrastructure projects such as harbour extensions and offshore wind farms. Fugro also has extensive capacity in equipment and expertise for the exploration of valuable mineral resources. We continue to work on expanding and improving our capabilities to provide single point, integrated solutions. This was a key driver for the company to implement a regional/global service line based organisation. The new organisation was launched at the start of 2012, and has quickly and successfully been adopted.

It is proposed that the dividend for 2012 be increased to EUR 2.00 per share (2011: EUR 1.50), consisting of a regular dividend of EUR 1.50 increased by a one-off extra dividend of EUR 0.50 in connection with the divestment of the Geoscience business. The total dividend of EUR 2.00 per share will be paid at the choice of the shareholder in cash or in shares. In case no choice is made, the dividend will be paid in shares.

tijd 09.02
De AEX 349,420 +1,55 +0,45% Fugro EUR 41,40 +3,95 vol. 73.000

shortlijst
AKO Capital LLP Fugro N.V. NL0000352565 1.15 2013-03-06